Primo Water Corporation (Nasdaq: PRMW) today reported financial
results for the third quarter and nine months ended September 30,
2019. In a separate press release issued today, the Company
also announced that Matt Sheehan was terminated as President and
Chief Executive Officer and that Billy D. Prim, the Company’s
Founder, Executive Chairman, and former Chairman & CEO, has
been appointed Interim President and CEO, effective immediately.
Business Highlights:
- Net sales increased 6.4% to $87.0
million
- Adjusted net sales, excluding ice
results, increased 10.5%
- Exchange net sales increased 12.7%
to a record $24.2 million
- Dispenser net sales increased 53.1%
to a record $18.3 million
- U.S. Exchange same-store-sales unit
growth of 18.3%
- Record Dispenser sell-thru units of
236,000
(All comparisons above are with respect to the
third quarter ended September 30, 2018)
“We generated another quarter of growth in sales
fueled by stronger than expected results in our Dispenser and
Exchange businesses,” commented Billy D. Prim, Primo Water’s
Executive Chairman, Interim President and CEO. “The
consistent sales growth in both Dispensers and Exchange along with
an improving Refill business gives us confidence in future sales
growth. Our adjusted EBITDA miss is unacceptable, especially in
light of this top-line performance, and we are re-committing
ourselves to better management of the controllable aspects of our
business to drive sustainable and profitable growth and value for
our shareholders.”
Third Quarter Results
Net sales increased 6.4% to $87.0 million from
$81.8 million for the prior year quarter, at the high-end of
the Company’s quarterly guidance. Net sales adjusted for the
June 2019 sale of the Company’s Ice assets (“Adjusted Net Sales”)
increased 10.5% to $87.0 million from $78.7 million for the prior
year quarter.
Dispenser segment net sales increased 53.1% to
$18.3 million from $11.9 million for the prior year quarter,
driven by record consumer demand, or sell-thru of 236,000 units, as
well as the timing of shipments as retailers prepare for fourth
quarter promotions.
Exchange net sales increased 12.7% to $24.2
million from $21.5 million for the prior year quarter, driven by
continued strength in U.S. same-store unit sales, which increased
to a 2019 high of 18.3%.
Refill net sales were $44.5 million compared to
$48.3 million for the prior year quarter, primarily due to the
sale of the Company’s Ice assets. Adjusted Net Sales for
Refill, excluding the Ice results, decreased 1.8% due to fewer
locations and lower overall sales volumes.
Gross margin percentage was 25.6%, compared to
28.7% for the prior year quarter. The decrease was a result
of the increase in sales mix for Dispensers, which represented
21.0% of total sales compared to 14.6% in the prior year quarter,
as well as lower margins in Refill and Exchange. Dispenser
gross margin for the quarter decreased to 3.5% from 5.2% primarily
as a result of changes in product and customer mix. Exchange
gross margin decreased to 29.8% from 31.1%, primarily related to
the increased investments in the free water program. Refill gross
margin for the quarter decreased to 32.4% from 33.4%, primarily the
result of the lower volume and incremental operating costs related
to addressing downtime.
Selling, general and administrative (“SG&A”)
expenses increased to $8.0 million from $7.4 million for the prior
year quarter, primarily due to increased non-cash, stock-based
compensation. Adjusted SG&A, excluding non-cash,
stock-based compensation, decreased 4.3% to $7.0 million or 8.1% of
net sales, from $7.3 million or 9.0% of net sales for the prior
year quarter.
Interest expense increased to $3.4 million from
$2.5 million for the prior year quarter. The increase was due
primarily to a $0.8 million non-cash charge related to the change
in fair market value of an interest rate swap.
Net income was $2.6 million, or $0.06 per
diluted share, compared to a net loss of $58.2 million, or $1.45
per diluted share in the prior year quarter. The prior year quarter
was impacted by $67.9 million of impairment losses. Adjusted
net income, a non-U.S. GAAP measure, was $4.3 million, or $0.10 per
diluted share, compared to adjusted net income of $7.5 million, or
$0.18 per diluted share, for the prior year quarter.
Adjusted EBITDA, a non-U.S. GAAP measure, was
$15.4 million compared to $16.2 million for the prior year
quarter.
Outlook
For the full year 2019, the Company now expects
net sales of $312.0 million to $316.0 million and adjusted EBITDA
of $50.0 million to $52.0 million for the full year, based on its
third quarter results and trends and continued investment in
promotional activities for the fourth quarter.
For the fourth quarter of 2019, the Company
expects net sales of $75.7 million to $79.7 million and adjusted
EBITDA of $11.5 million to $13.5 million.
The Company does not provide guidance for the
most directly comparable GAAP measure to adjusted EBITDA, net
income, and similarly cannot provide a reconciliation between its
forecasted adjusted EBITDA and net income metrics without
unreasonable effort due to the unavailability of reliable
estimates, which include interest expense and special items. These
items, among others, are not within the Company’s control and may
vary greatly between periods and could significantly impact future
financial results.
CEO Transition
The Board has retained a leading global
executive search firm to assist the Board in identifying a CEO with
the capabilities and experience aligned with the Company’s
strategic priorities.
Conference Call and Webcast
The Company will host a conference call with
Susan Cates, Lead Independent Director, Billy Prim, Executive
Chairman, Interim President and CEO, and David Mills, Chief
Financial Officer, to discuss its leadership transition and
financial results at 4:30 p.m. ET today, November 5, 2019. The call
will be broadcast live over the Internet hosted at the Investor
Relations section of Primo Water's website at www.primowater.com,
and will be archived online through November 19, 2019. In addition,
listeners may dial (866) 712-2329 in North America, and
international listeners may dial (253) 237-1244.
About Primo Water Corporation
Primo Water Corporation (Nasdaq: PRMW) is an
environmentally and ethically responsible company with the purpose
of inspiring healthier lives through better water. Primo is North
America's leading single source provider of water dispensers,
multi-gallon purified bottled water, and self-service refill
drinking water. Primo’s Dispensers, Exchange and Refill
products are available in over 45,000 retail locations and online
throughout the United States and Canada. For more information and
to learn more about Primo Water, please visit our website at
www.primowater.com.
Forward-Looking Statements
Certain statements contained herein are not
based on historical fact and are "forward-looking statements"
within the meaning of the applicable securities laws and
regulations. These statements include the Company’s financial
guidance, including the impact thereon of third quarter results and
trends and continued investment in promotional activities for the
fourth quarter; our confidence in future sales growth and our
re-commitment to better management of the controllable aspects of
our business to drive sustainable and profitable growth and value
for our shareholders. These statements can otherwise be identified
by the use of words such as "anticipate," "believe," "could,"
"estimate," "expect," "feel," "forecast," "intend," "may," "plan,"
"potential," “predict,” "project," “seek,” "should," "would,”
“will,” and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Owing to the
uncertainties inherent in forward-looking statements, actual
results could differ materially from those stated herein. Factors
that could cause actual results to differ materially from those in
the forward-looking statements include, but are not limited to, the
inability to hire or a prolonged delay in hiring a new CEO; the
loss of major retail customers of the Company or the reduction in
volume or change in timing of purchases by major retail customers;
the consolidation of retail customers and disruption of the retail
business model; lower than anticipated consumer and retailer
acceptance of and demand for the Company's products and services;
difficulties realizing expected growth in Refill sales volume and
net sales from operational issues related to downtime of certain
Refill machines, and the potential that increases in Refill prices
will be offset by lower Refill sales volume; the highly competitive
environment in which we operate and the entry of a competitor with
greater resources into the marketplace; risks that we may incur
operating losses in the future; competition and other business
conditions in the water and water dispenser industries in general;
adverse changes in the Company's relationships with its independent
bottlers, distributors and suppliers in its Exchange business; the
potential that our distributors do not perform to our retailers’
expectations, that we may have difficulty managing our distributor
operations or that we or our distributors are not able to manage
our growth effectively; our inability to obtain capital when
desired on favorable terms, if at all, and the potential dilution
such capital acquisition may have on our existing stockholders; the
loss of key Company personnel; risks related to fluctuations in
currency exchange rates and international political uncertainties,
particularly with China; risks associated with the Company’s
potential expansion into international markets, and our recent
entrance into a partnership with a third party in Mexico related to
Mexico refill operations, that could be harmful to our business and
operations; recently imposed tariffs that cover certain of our
products, the potential for increases in existing tariffs or new
tariffs, which may materially adversely affect our business, and
other potential changes in international trade relations
implemented by the U.S. presidential administration; risks related
to contamination of the water we sell; the risks posed to our
Refill business by electrical outages, localized municipal tap
water system shut-downs, “boil water” directives or increases in
the cost of electricity or municipal tap water; the misuse of
components of our Dispensers by end users; interruption or
disruption of our supply chain, distribution channels, bottling and
distribution network or third-party service providers; the
Company’s experiencing product liability, product recall or higher
than anticipated rates of sales returns associated with product
quality or safety issues; dependence on key management information
systems; risks related to cyber breaches, cybersecurity lapses or a
failure or corruption of one or more of our key information
technology systems, networks, processes, associated sites or
service providers, and our ability to maintain confidential or
credit card information of third parties or other private data
relating to the Company, its employees or any third party; changes
related to the phase-out of LIBOR; risks related to inventory loss
and theft of inventory and cash; the impact of impairment of
intangibles on our results of operations; risks related to the
brand unification in our Refill segment; our ability to effectively
implement certain strategic marketing and brand activation
strategies, the incurrence of potentially significant and
unanticipated costs, resources and time associated with the
development and implementation of new marketing and brand
activation strategies, and the risk that such strategies are
ultimately ineffective; our ability to build and maintain our brand
image and corporate reputation; the Company's inability to
efficiently expand operations and capacity to meet growth; the
Company's inability to develop, introduce and produce new product
offerings within the anticipated timeframe or at all; general
economic conditions; the possible adverse effects that decreased
discretionary consumer spending may have on the Company’s business;
risks related to acquisitions and investments in new product lines,
business or technologies; risks related to activist stockholders,
including the incurrence of substantial costs, diversion of
management’s attention and resources and the related impacts on our
business; changes in the regulatory framework governing the
Company's business; significant liabilities or costs associated
with litigation or other legal proceedings; the possibility that
our ability to use our net operating loss carryforwards in the
United States may be limited; the restrictions imposed upon our
business as a result of the restrictive covenants contained in our
credit agreements; the Company’s inability to comply with its
covenants in its credit facility; the possibility that we may fail
to generate sufficient cash flow to service our debt obligations;
the negative effects that global capital and credit market issues
may have on our liquidity; the costs of borrowing on our operations
as well as other risks described more fully in the Company's
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K filed on March 6, 2019 and its
subsequent filings under the Securities Exchange Act of 1934.
Forward-looking statements reflect management's analysis as of the
date of this press release. The Company does not undertake to
revise these statements to reflect subsequent developments, other
than in its regular, quarterly earnings releases or as otherwise
required by applicable securities laws.
Use of Non-U.S. GAAP Financial Measures
To supplement its financial statements, the
Company provides investors with information related to adjusted
EBITDA, adjusted net income, adjusted SG&A, adjusted net sales
and adjusted net sales for Refill, which are not financial measures
calculated in accordance with generally accepted accounting
principles in the United States (“U.S. GAAP”). Adjusted EBITDA is
calculated as net (loss) income before depreciation and
amortization; interest expense, net; income tax benefit; change in
fair value of warrant liability; non-cash, stock-based compensation
expense; special items; and impairment charges and other.
Adjusted net income is defined as net (loss) income less income tax
benefit; non-cash, stock-based compensation expense; special items;
impairment charges and other; and debt refinancing costs.
Adjusted SG&A is defined as SG&A less non-cash, stock-based
compensation expense. Adjusted net sales is calculated as total net
sales less net sales related to the ice assets sold in June
2019. Adjusted net sales for Refill is calculated as Refill
segment net sales less net sales related to the ice assets sold in
June 2019. The Company believes these non-U.S. GAAP financial
measures provide useful information to management, investors and
financial analysts regarding certain financial and business trends
relating to the Company’s financial condition and results of
operations. Management uses these non-U.S. GAAP financial measures
to compare the Company's performance to that of prior periods for
trend analyses and planning purposes. These non-U.S. GAAP financial
measures are also presented to the Company’s Board of Directors and
adjusted EBITDA is used in its credit agreements.
Non-U.S. GAAP measures should not be considered
a substitute for, or superior to, financial measures calculated in
accordance with U.S. GAAP. These non-U.S. GAAP measures exclude
significant expenses that are required by U.S. GAAP to be recorded
in the Company's financial statements and are subject to inherent
limitations.
FINANCIAL TABLES TO FOLLOW
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
|
Consolidated Statements of Operations |
|
(Unaudited; in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
86,967 |
|
|
$ |
81,770 |
|
|
$ |
236,275 |
|
|
$ |
231,231 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
64,694 |
|
|
58,312 |
|
|
174,418 |
|
|
164,462 |
|
Selling, general and administrative expenses |
|
8,007 |
|
|
7,369 |
|
|
27,105 |
|
|
26,169 |
|
Special items |
|
827 |
|
|
139 |
|
|
2,240 |
|
|
626 |
|
Depreciation and amortization |
|
7,657 |
|
|
6,194 |
|
|
21,499 |
|
|
18,365 |
|
Impairment charges and other |
|
(217 |
) |
|
67,940 |
|
|
109 |
|
|
68,184 |
|
Total operating costs and expenses |
|
80,968 |
|
|
139,954 |
|
|
225,371 |
|
|
277,806 |
|
Income (loss) from operations |
|
5,999 |
|
|
(58,184 |
) |
|
10,904 |
|
|
(46,575 |
) |
Interest expense, net |
|
3,378 |
|
|
2,465 |
|
|
8,680 |
|
|
18,909 |
|
Income (loss) before income taxes |
|
2,621 |
|
|
(60,649 |
) |
|
2,224 |
|
|
(65,484 |
) |
Income tax benefit |
|
– |
|
|
(2,411 |
) |
|
– |
|
|
(8,907 |
) |
Net income (loss) |
|
$ |
2,621 |
|
|
$ |
(58,238 |
) |
|
$ |
2,224 |
|
|
$ |
(56,577 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
(1.45 |
) |
|
$ |
0.06 |
|
|
$ |
(1.55 |
) |
Diluted |
|
$ |
0.06 |
|
|
$ |
(1.45 |
) |
|
$ |
0.05 |
|
|
$ |
(1.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing |
|
|
|
|
|
|
|
|
|
|
|
|
earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
40,515 |
|
|
40,072 |
|
|
40,400 |
|
|
36,410 |
|
Diluted |
|
41,112 |
|
|
40,072 |
|
|
41,096 |
|
|
36,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Segment Information |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Segment net sales: |
|
|
|
|
|
|
|
|
Refill |
|
$ |
44,475 |
|
|
$ |
48,330 |
|
|
$ |
125,076 |
|
|
$ |
134,542 |
|
Exchange |
|
|
24,234 |
|
|
|
21,513 |
|
|
|
64,590 |
|
|
|
59,777 |
|
Dispensers |
|
|
18,258 |
|
|
|
11,927 |
|
|
|
46,609 |
|
|
|
36,912 |
|
|
|
$ |
86,967 |
|
|
$ |
81,770 |
|
|
$ |
236,275 |
|
|
$ |
231,231 |
|
|
|
|
|
|
|
|
|
|
Segment income from operations: |
|
|
|
|
|
|
|
|
Refill |
|
$ |
12,813 |
|
|
$ |
14,565 |
|
|
$ |
34,373 |
|
|
$ |
40,043 |
|
Exchange |
|
|
6,668 |
|
|
|
6,274 |
|
|
|
18,030 |
|
|
|
17,567 |
|
Dispensers |
|
|
175 |
|
|
|
323 |
|
|
|
1,884 |
|
|
|
2,309 |
|
Corporate |
|
|
(5,390 |
) |
|
|
(5,073 |
) |
|
|
(19,535 |
) |
|
|
(19,319 |
) |
Special items |
|
|
(827 |
) |
|
|
(139 |
) |
|
|
(2,240 |
) |
|
|
(626 |
) |
Depreciation and amortization |
|
|
(7,657 |
) |
|
|
(6,194 |
) |
|
|
(21,499 |
) |
|
|
(18,365 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges and other |
|
|
217 |
|
|
|
(67,940 |
) |
|
|
(109 |
) |
|
|
(68,184 |
) |
|
|
$ |
5,999 |
|
|
$ |
(58,184 |
) |
|
$ |
10,904 |
|
|
$ |
(46,575 |
) |
|
|
|
|
|
|
|
|
|
Segment gross margin: |
|
|
|
|
|
|
|
|
Refill |
|
|
32.4 |
% |
|
|
33.4 |
% |
|
|
31.1 |
% |
|
|
33.2 |
% |
Exchange |
|
|
29.8 |
% |
|
|
31.1 |
% |
|
|
30.4 |
% |
|
|
31.7 |
% |
Dispensers |
|
|
3.5 |
% |
|
|
5.2 |
% |
|
|
7.1 |
% |
|
|
8.5 |
% |
Total gross margin |
|
|
25.6 |
% |
|
|
28.7 |
% |
|
|
26.2 |
% |
|
|
28.9 |
% |
|
|
|
|
|
|
|
|
|
Other: |
|
|
|
|
|
|
|
|
Exchange U.S. same-store unit growth |
|
|
18.3 |
% |
|
|
10.4 |
% |
|
|
15.2 |
% |
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
Refill five-gallon equivalent units |
|
|
24,846 |
|
|
|
25,613 |
|
|
|
68,128 |
|
|
|
73,949 |
|
Exchange five-gallon equivalent units |
|
|
5,143 |
|
|
|
4,469 |
|
|
|
13,710 |
|
|
|
12,355 |
|
|
|
|
|
|
|
|
|
|
Sell-thru of Dispenser units |
|
|
236 |
|
|
|
187 |
|
|
|
639 |
|
|
|
567 |
|
|
|
|
|
|
|
|
|
|
Locations: |
|
|
|
|
|
|
|
|
Refill (Excluding Ice) |
|
|
23,100 |
|
|
|
24,900 |
|
|
|
|
|
Exchange |
|
|
13,800 |
|
|
|
13,200 |
|
|
|
|
|
Dispensers |
|
|
8,700 |
|
|
|
7,300 |
|
|
|
|
|
Total (Excluding Ice) |
|
|
45,600 |
|
|
|
45,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Condensed Consolidated Balance Sheets |
(Unaudited; in thousands, except par value data) |
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
2,021 |
|
|
$ |
7,301 |
|
Accounts receivable, net |
|
|
27,026 |
|
|
|
19,179 |
|
Inventories |
|
|
11,878 |
|
|
|
9,965 |
|
Prepaid expenses and other current assets |
|
|
7,425 |
|
|
|
7,004 |
|
Total current assets |
|
|
48,350 |
|
|
|
43,449 |
|
|
|
|
|
|
Bottles, net |
|
|
5,738 |
|
|
|
4,618 |
|
Property and equipment, net |
|
|
108,162 |
|
|
|
95,627 |
|
Operating lease right-of-use assets |
|
|
5,006 |
|
|
|
– |
|
Intangible assets, net |
|
|
74,469 |
|
|
|
78,671 |
|
Goodwill |
|
|
94,746 |
|
|
|
91,814 |
|
Note receivable, net of current portion |
|
|
3,094 |
|
|
|
– |
|
Other assets |
|
|
663 |
|
|
|
661 |
|
Assets held-for-sale at fair value |
|
|
– |
|
|
|
5,288 |
|
Total assets |
|
$ |
340,228 |
|
|
$ |
320,128 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
31,583 |
|
|
$ |
25,191 |
|
Accrued expenses and other current liabilities |
|
|
9,241 |
|
|
|
8,274 |
|
Current portion of long-term debt and finance leases |
|
|
11,562 |
|
|
|
11,159 |
|
Total current liabilities |
|
|
52,386 |
|
|
|
44,624 |
|
|
|
|
|
|
Long-term debt and finance leases, net of current portion and debt
issuance costs |
|
|
186,638 |
|
|
|
178,966 |
|
Operating leases, net of current portion |
|
|
3,192 |
|
|
|
– |
|
Other long-term liabilities |
|
|
1,157 |
|
|
|
607 |
|
Liabilities held-for-sale at fair value |
|
|
– |
|
|
|
1,438 |
|
Total liabilities |
|
|
243,373 |
|
|
|
225,635 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Preferred stock, $0.001 par value - 10,000 shares authorized, |
|
|
|
|
none issued and outstanding |
|
|
– |
|
|
|
– |
|
Common stock, $0.001 par value - 70,000 shares authorized, |
|
|
|
|
39,228 and 38,567 shares issued and outstanding |
|
|
|
|
at September 30, 2019 and December 31, 2018, respectively |
|
|
39 |
|
|
|
39 |
|
Additional paid-in capital |
|
|
424,935 |
|
|
|
424,635 |
|
Accumulated deficit |
|
|
(326,702 |
) |
|
|
(328,599 |
) |
Accumulated other comprehensive loss |
|
|
(1,417 |
) |
|
|
(1,582 |
) |
Total stockholders’ equity |
|
|
96,855 |
|
|
|
94,493 |
|
Total liabilities and stockholders’ equity |
|
$ |
340,228 |
|
|
$ |
320,128 |
|
|
|
|
|
|
Primo Water Corporation |
Consolidated Statements of Cash Flows |
(Unaudited; in thousands) |
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
|
2018 |
|
Cash flows from operating activities: |
|
|
|
Net income (loss) |
$ |
2,224 |
|
|
$ |
(56,577 |
) |
Adjustments to reconcile net income (loss) to net cash |
|
|
|
provided by operating activities: |
|
|
|
Depreciation and amortization |
|
21,499 |
|
|
|
18,365 |
|
Impairment charges and other |
|
109 |
|
|
|
68,184 |
|
Stock-based compensation expense |
|
3,479 |
|
|
|
2,710 |
|
Non-cash interest expense |
|
1,005 |
|
|
|
2,547 |
|
Bad debt expense |
|
78 |
|
|
|
170 |
|
Deferred income tax benefit |
|
– |
|
|
|
(8,907 |
) |
Realized foreign currency exchange (gain) loss and other, net |
|
(364 |
) |
|
|
338 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(7,886 |
) |
|
|
(5,724 |
) |
Inventories |
|
(1,907 |
) |
|
|
(3,431 |
) |
Prepaid expenses and other current assets |
|
(185 |
) |
|
|
(618 |
) |
Operating lease right-of-use assets |
|
862 |
|
|
|
– |
|
Book overdraft |
|
1,144 |
|
|
|
1,023 |
|
Accounts payable |
|
4,832 |
|
|
|
6,523 |
|
Accrued expenses and other current liabilities |
|
(1,004 |
) |
|
|
(796 |
) |
Operating lease liabilities |
|
(816 |
) |
|
|
– |
|
Net cash provided by operating activities |
|
23,070 |
|
|
|
23,807 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Purchases of property and equipment, net |
|
(18,484 |
) |
|
|
(14,200 |
) |
Purchases of bottles, net of disposals |
|
(3,314 |
) |
|
|
(1,596 |
) |
Proceeds from the sale of property and equipment |
|
855 |
|
|
|
227 |
|
Proceeds from the sale of Ice Assets |
|
400 |
|
|
|
– |
|
Proceeds from redemption of investment in Glacier securities |
|
– |
|
|
|
6,277 |
|
Acquisitions, net cash acquired |
|
(6,283 |
) |
|
|
– |
|
Additions to intangible assets |
|
(29 |
) |
|
|
(975 |
) |
Net cash used in investing activities |
|
(26,855 |
) |
|
|
(10,267 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Borrowings under Revolving Credit Facilities |
|
44,000 |
|
|
|
29,000 |
|
Payments under Revolving Credit Facilities |
|
(33,000 |
) |
|
|
(29,000 |
) |
Borrowings under Term loans |
|
– |
|
|
|
190,000 |
|
Payments under Term loans |
|
(7,125 |
) |
|
|
(186,515 |
) |
Payments upon redemption of Junior Subordinated Debentures |
|
– |
|
|
|
(87,629 |
) |
Finance lease payments |
|
(2,219 |
) |
|
|
(1,190 |
) |
Proceeds from common stock issuance, net of costs |
|
– |
|
|
|
70,791 |
|
Proceeds from warrant exercises, net |
|
68 |
|
|
|
12,150 |
|
Stock option and employee stock purchase activity |
|
762 |
|
|
|
1,589 |
|
Payments for taxes related to net share settlement |
|
|
|
of equity awards |
|
(4,009 |
) |
|
|
(11,013 |
) |
Debt issuance costs and other |
|
– |
|
|
|
(1,671 |
) |
Net cash used in financing activities |
|
(1,523 |
) |
|
|
(13,488 |
) |
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
28 |
|
|
|
(8 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(5,280 |
) |
|
|
44 |
|
Cash and cash equivalents, beginning of year |
|
7,301 |
|
|
|
5,586 |
|
Cash and cash equivalents, end of period |
$ |
2,021 |
|
|
$ |
5,630 |
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
Promissory note received in exchange for sale of ice assets |
$ |
3,294 |
|
|
$ |
– |
|
Cash paid for interest |
$ |
2,487 |
|
|
$ |
2,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Non-GAAP EBITDA and Adjusted EBITDA Reconciliation |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
2,621 |
|
|
$ |
(58,238 |
) |
|
$ |
2,224 |
|
|
$ |
(56,577 |
) |
Depreciation and amortization |
|
|
7,657 |
|
|
|
6,194 |
|
|
|
21,499 |
|
|
|
18,365 |
|
Interest expense, net |
|
|
3,378 |
|
|
|
2,465 |
|
|
|
8,680 |
|
|
|
18,909 |
|
Income tax benefit |
|
|
– |
|
|
|
(2,411 |
) |
|
|
– |
|
|
|
(8,907 |
) |
EBITDA |
|
|
13,656 |
|
|
|
(51,990 |
) |
|
|
32,403 |
|
|
|
(28,210 |
) |
Non-cash, stock-based compensation expense |
|
|
987 |
|
|
|
31 |
|
|
|
3,479 |
|
|
|
2,710 |
|
Special items (1) |
|
|
827 |
|
|
|
139 |
|
|
|
2,240 |
|
|
|
626 |
|
Impairment charges and other |
|
|
(119 |
) |
|
|
68,044 |
|
|
|
405 |
|
|
|
68,444 |
|
Adjusted EBITDA |
|
$ |
15,351 |
|
|
$ |
16,224 |
|
|
$ |
38,527 |
|
|
$ |
43,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Non-GAAP Adjusted Net Income |
(Unaudited; in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
2,621 |
|
|
$ |
(58,238 |
) |
|
$ |
2,224 |
|
|
$ |
(56,577 |
) |
Income tax benefit |
|
|
– |
|
|
|
(2,411 |
) |
|
|
– |
|
|
|
(8,907 |
) |
Income (loss) before income taxes |
|
|
2,621 |
|
|
|
(60,649 |
) |
|
|
2,224 |
|
|
|
(65,484 |
) |
Non-cash, stock-based compensation expense |
|
|
987 |
|
|
|
31 |
|
|
|
3,479 |
|
|
|
2,710 |
|
Special items (1) |
|
|
827 |
|
|
|
139 |
|
|
|
2,240 |
|
|
|
626 |
|
Impairment charges and other |
|
|
(217 |
) |
|
|
67,940 |
|
|
|
109 |
|
|
|
68,184 |
|
Debt refinancing costs |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
6,864 |
|
Adjusted net income |
|
$ |
4,218 |
|
|
$ |
7,461 |
|
|
$ |
8,052 |
|
|
$ |
12,900 |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.19 |
|
|
$ |
0.20 |
|
|
$ |
0.35 |
|
Diluted |
|
$ |
0.10 |
|
|
$ |
0.18 |
|
|
$ |
0.20 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing |
|
|
|
|
|
|
|
|
adjusted earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
40,515 |
|
|
|
40,072 |
|
|
|
40,400 |
|
|
|
36,410 |
|
Diluted |
|
|
41,112 |
|
|
|
41,084 |
|
|
|
41,096 |
|
|
|
37,605 |
|
(1) Within “Special items” are certain expense
items which we do not believe to be indicative of our core
operations, or we believe are significant to our current operating
results warranting separate classification. These charges
generally include (i) acquisition-related expenses including fees
payable to financial, legal, accounting and other advisors, (ii)
expenses associated with restructuring and other costs, and (iii)
activist investor-related expense, including fees payable to legal
and other advisors.
|
Primo Water Corporation |
Non-GAAP Adjusted SG&A as a percentage of Net Sales |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
$ |
8,007 |
|
|
$ |
7,369 |
|
|
$ |
27,105 |
|
|
$ |
26,169 |
|
Less: Non-cash stock based compensation |
|
|
(987 |
) |
|
|
(31 |
) |
|
|
(3,479 |
) |
|
|
(2,710 |
) |
Adjusted selling, general and administrative expenses |
|
$ |
7,020 |
|
|
$ |
7,338 |
|
|
$ |
23,626 |
|
|
$ |
23,459 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
86,967 |
|
|
$ |
81,770 |
|
|
$ |
236,275 |
|
|
$ |
231,231 |
|
|
|
|
|
|
|
|
|
|
Adjusted selling, general and administrative expenses as a
percentage of net sales |
|
|
8.1 |
% |
|
|
9.0 |
% |
|
|
10.0 |
% |
|
|
10.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Non-GAAP Adjusted Net Sales |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
86,967 |
|
|
$ |
81,770 |
|
|
$ |
236,275 |
|
|
$ |
231,231 |
|
Less: Ice net sales |
|
|
– |
|
|
|
(3,042 |
) |
|
|
(2,654 |
) |
|
|
(6,534 |
) |
Adjusted net sales |
|
$ |
86,967 |
|
|
$ |
78,728 |
|
|
$ |
233,621 |
|
|
$ |
224,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Non-GAAP Adjusted Net Sales, Refill Segment |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Refill segment net sales |
|
$ |
44,475 |
|
|
$ |
48,330 |
|
|
$ |
125,076 |
|
|
$ |
134,542 |
|
Less: Ice net sales |
|
|
– |
|
|
|
(3,042 |
) |
|
|
(2,654 |
) |
|
|
(6,534 |
) |
Adjusted Refill segment net sales |
|
$ |
44,475 |
|
|
$ |
45,288 |
|
|
$ |
122,422 |
|
|
$ |
128,008 |
|
|
|
|
|
|
|
|
|
|
Contact:Primo Water CorporationDavid Mills,
Chief Financial Officer(336) 331-4000
ICR Inc.Katie Turner(646) 277-1228
Primo Water (NASDAQ:PRMW)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Primo Water (NASDAQ:PRMW)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024